2. Extension of time limit for ϐiling revised return from 31st December to 31st March with nominal late fees.
3. Allowing ϐiling of updated return for reduction of losses: Updated return ϐiling is proposed to be allowed where a taxpayer reduces the amount of loss originally claimed in the return ϐiled within the due date.
4. Allowing ϐiling of updated return even after issuance of reassessment notice: Updated return is proposed to be permitted even after issuance of reassessment notice, subject to ϐiling within the period speciϐied in the notice and payment of additional tax of 10%.
5. Rationalizing Penalty and Prosecution: There will be no interest liability on the taxpayer on the penalty amount for the period of appeal before the ϐirst appellate authority irrespective of the outcome of appeal process. Further, quantum of pre-payment is being reduced from 20% to 10% and will continue to be calculated only on core tax demand.
9. New Income Tax Act, 2025 The simpliϐied Income Tax Rules and Forms will be notiϐied shortly, giving adequate time to taxpayers to familiar themselves with its requirements.
10. Any interest awarded by the Motor Accident Claims Tribunal to a natural person will be exempt from Income Tax, and any TDS on this account will be done away with.
11. Supply of manpower services is proposed to be speciϐically brought within the ambit of payment to contractors for the purpose of TDS to avoid ambiguity. Thus, TDS on these services will be at the rate of either 1% or 2% only.
12. A scheme for small taxpayers wherein a rule-based automated process will enable obtaining a lower or nil deduction certiϐicate instead of ϐiling an application with the assessing ofϐicer.
13. For the ease of taxpayers holding securities in multiple companies, It was proposed to enable depositories to accept Form 15G or Form 15H from the investor and provide it directly to various relevant companies.
14. TDS on the sale of immovable property by a non-resident is proposed to be deducted and deposited through resident buyer’s PAN based challan instead of requiring TAN.
15. To address practical issues of small taxpayers like students, young professionals, tech employees, relocated NRIs, and such others, a one-time 6-month foreign asset disclosure scheme introduced for these taxpayers to disclose income or assets below a certain size. This scheme would be applicable for two categories of taxpayers namely,
(A) who did not disclose their overseas income or asset and
(B) who disclosed their overseas income and/or paid due tax, but could not declare the asset acquired.
For category (A), the limit of undisclosed income/asset is proposed to be up to 1 crore rupees. They need to pay 30% of Fair Market Value of asset or 30% of undisclosed income as tax and 30% as additional income tax in lieu of penalty and would thereby get immunity from prosecution.
For category (B), asset value is proposed to be up to 5 crore rupees. Here, immunity from both penalty and prosecution will be available with the payment of fee of 1 lakh rupees.
16. Immunity in case of misreporting: in such a case the taxpayer will need to pay 100% of the tax amount as an additional income tax over and above the tax and interest due.
17. Penalties for certain technical defaults such as failure to get accounts audited, non-furnishing of transfer pricing audit report and default in furnishing statement for ϐinancial transactions, are proposed to be converted into fee.
18. There is no penalty presently for non-disclosure of non-immovable foreign assets with aggregate value less than 20 lakh rupees. It was proposed to also provide them with immunity from prosecution with retrospective effect from 1.10.2024.
19. Deduction to a primary cooperative society extended to also include supply of cattle feed and cotton seed produced by its members.
20. It was proposeed to allow inter-cooperative society dividend income as deduction under the new tax regime to the extent it is further distributed to its members.
21. Recognising the need to enable critical infrastructure and boost investment in data centres, It was proposed to provide tax holiday till 2047 to any foreign company that provides cloud services to customers globally by using data centre services from India. It will, however, need to provide services to Indian customers through an Indian reseller entity.
22. It was proposed to incorporated ICDS in Ind AS. Separate accounting requirement based on ICDS will be done away with from the tax year 2027- 28.
23(a). To encourage companies to shift to the new regime, set-off of brought forward MAT credit is proposed to be allowed to companies only in the new regime. Set-off using available MAT credit is proposed to be allowed to an extent of 1/4th of the tax liability in the new regime.
23(b). MAT is proposed to be made ϐinal tax. So, there will be no further credit accumulation from 1st April 2026. In line with this change, the rate of ϐinal tax is being reduced to 14% from the current MAT rate of 15%. The brought forward MAT credit of taxpayers accumulated till 31st March 2026, will continue to be available to them for set-off as above
24. There are honest taxpayers who are willing to settle disputes by paying all their dues. But they get deterred due to negative connotation associated with penalty. They will now be able close cases by paying an additional amount in lieu of penalty.
